In his 15-year run as founder and CEO of Legendary Entertainment, Thomas Tull made and financed many winning films along with some stinkers. But he was always master of his own fate.
With this week’s acquisition of his production company by Dalian Wanda of China — valued at $3.5 billion — the 45-year-old impresario has turned from a central shareholder of Legendary to an executive with an employment contract, though still the one atop the operation, according to the terms of the deal with the Chinese conglomerate, which are slowly emerging after Monday’s announcement.
Wanda purchased all of the shares of Legendary. A new entity was then created to accommodate the Chinese conglomerate’s ownership of an American company.
A source familiar with the agreement said the new owners have signed Tull and other top Legendary managers to multi-year contracts, with incentives tied to the performance of the company, which will make not only films for world audiences but Chinese language movies for consumption in the world’s fastest-growing market.
“Thomas will have an interest in the company’s success as if he owned stock in the company,” said the source, who declined to be named discussing the confidential deal terms. “But he won’t have stock in the company.”
The new owners stressed in the announcement that was made Tuesday, Beijing time, that Tull would continue to play a central role. Jack Gao, head of Wanda Film Holdings Co., said Tull will be “very central and very important in the overall Legendary in the future. We will support him by all means. He is the one to run the show.”
The new owners and the American lawyers who helped put together the transaction declined to divulge any details of Tull’s employment.
Questions about the regulatory advantages of the new arrangement have also arisen this week. Experts on business in China earlier initially said that, despite the purchase by a major Chinese company, Legendary movies would not automatically be exempt from the quotas that limit the number of foreign films that screen in the Middle Kingdom. But the new partners clearly believe that the Wanda connection will help break those barriers.
“You have to look at this not just as what the regulations say, but in a broader context,” said one Wanda ally. “The rules say you have to also have one-third of your cast and one-third of your crew from China. But it’s not lost on anyone that it’s a goal of the Chinese government to have Chinese films out-gross American films. If Legendary films can be counted as part of the Chinese total, that helps the cause.”
The Legendary/Wanda transaction is expected to take six to eight weeks to close.